Treasury Secretary Janet Yellen signaled broad support for US financial regulators during an interview with CNBC’s Squawk Box. The comments follow hot on the heels of this week’s SEC lawsuits against Binance and Coinbase, the two largest crypto exchanges.
In an interview with CNBC’s Squawk Box on Wednesday, Treasury Secretary Janet Yellen conveyed her backing of Gary Gensler’s aggressive strategy at the Securities and Exchange Commission (SEC). She also voiced her approval of the Commodities Futures Trading Commission (CFTC).
Yellen Is “Very Supportive”
Speaking to Andrew Ross Sorkin, the show’s co-anchor, Yellen said she was “very supportive” of regulatory agencies. And agreed with their use of the tools that they have to push a tough agenda.
Yellen described her department’s long and detailed study of crypto’s potential destabilizing role. On this subject, she was blunt:
“The Treasury recently wrote a set of reports in response to the president’s executive order to examine the risks inherent in crypto, and we identified a number of risks. Some of which—the risk to consumers and investors—our laws are already strong. The SEC [and] the CFTC, and other regulators have the ability and the tools to protect consumers and investors… It is certainly appropriate that that do that.”
Learn more about how the SEC defines a security:
The Treasury Secretary appeared on Squawk Box only a day after Gensler made comments of his own about digital currencies. In Gensler’s view, there is no need for more digital money in the foreseeable future.
“We already have digital currency. It’s called the US dollar; it’s called the euro; it’s called the yen. We have digital investments… whether it’s the big tech companies, automobile companies, it’s all digital right now, the investing world,” Gensler said.
Yellen has previously endorsed strong regulations for crypto firms. Speaking to Reuters in March during the G20 meeting of finance ministers, she said it was “critical to put in place a strong regulatory framework.”
“We haven’t suggested outright banning of crypto activities,” Yellen clarified at the time.
More Regulation Incoming
The Brooklyn-born economist is one of the most recognizable faces in finance and policy circles. Before becoming the 78th United States Secretary of the Treasury, she also served as chair of the Federal Reserve from 2014 to 2018.
Her brief comments may carry more weight than first appears. Major appearances by cabinet members on national programs like CNBC’s The Squawk Box are rarely done without the approval of higher-ups. Particularly on the heels of sensational news, such as the suing of Coinbase and Binance. It seems likely, therefore, that the Biden White House—alongside Yellen—is broadly supportive of Gensler’s bold moves.
In the Squawk Box interview, Yellen also said she looked forward to working with Congress on further regulation. Republican chairs of House committees have recently proposed legislation to enable crypto exchanges to register with the SEC and trade digital securities, commodities, and stablecoins on a unified platform.
But the proposed rules are neither bipartisan nor comprehensive. Despite addressing some industry demands, the proposal lacks Democratic support and upholds the SEC’s authority to classify assets as securities.
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